UAE millionaires second-most confident in the world on financial outlook

DUBAI

Millionaires in the UAE are the second-most confident group or wealthy individuals who are optimistic on their financial outlook, according to a research conducted by UBS.

In the global ranking, the UAE stands second with 77 per cent optimistic versus just 5 per cent who feel the opposite while Switzerland is marginally ahead with 78 per cent with confident outlook.

Overall UAE millionaires are more bullish than the global average and are significantly more confident about both their own prospects and the wider economic outlook than most of their counterparts in other major markets, according to the latest UBS Confidence Index.

The research was conducted among over 5,400 millionaires with at least $1 million investable assets (excluding property). The global sample was split across nine markets such as Germany, Hong Kong, Italy, Singapore, Switzerland, Taiwan, the UAE, the UK and the US. In the US, over 2,200 people were surveyed, while a minimum of 400 responses were gathered in each of the other eight markets.

While the US and Germany’s rich showed significantly high levels of optimism with 73 per cent of respondents indicating confidence in their financial outlook, the study showed, in places like Singapore and Hong Kong and Taiwan had only around 50 per cent saying they are confident on the outlook.

“Despite recent market turbulences, we continue to see high levels of confidence among the world’s wealth holders. Overall confidence, measured by gauging investors optimism on the national economy and personal financial situation over the long and short term, is highest in Continental Europe, the Middle East and the US,” said Ali Janoudi, Head of Wealth Management, Central & Eastern Europe, Middle East & Africa, France & Benelux Intl. at UBS.

Globally, strong optimism about the financial climate is reflected in millionaires’ ranking of key concerns. Worries about a market downturn, interest rate rises, inflation and market volatility all fall outside the top five. Instead, concerns centre on societal challenges: rising health care costs, cyber-security, and terrorism are today’s top three fears.

In the UAE, wealth holders cite a range of concerns including geopolitical risk, inflation, tax increases and terrorism. Male millionaires in the Emirates typically cite a higher level of concern about each of these issues than their female counterparts.

“The UAE ranks as the second most confident market among all countries globally. But one trend that we are seeing the world over is a natural bias among millionaires towards their own domestic stock markets. Spreading risk remains important in case we do see any kind of correction in future,” Janoudi said.

The UAE has 55,700 millionaires according to the 2017 World Wealth Report business consultancy Capgemini. Growing migration of the wealthy to the UAE combined with the improving economic conditions are boosting wealth creation in the country. Recent economic forecasts from the International Monetary Fund (IMF) and the World Bank expect the UAE economy to grow 3.5 per cent in 2018 and 4 per cent in 2019. Revival in the economy led by the non-oil private sector and the recovery of prices from prolonged decline since early 2015 are expected to support fiscal situation and government-led investments.